Watch our video on how to invest in the stock market with little money.
HOW TO INVEST IN THE STOCK MARKET WITH LITTLE MONEY
- Here's how to invest in the stock market with little money:
- Options are one of the best ways with accounts less than $5,000
- Credit spreads are the safest and require the least amount of capital
- Naked options are most profitable but most risky
- Debit spreads help to limit capital risk
- Iron condors are profitable in range bound markets
- Penny stocks are very popular but risky to hold
- Day trading penny stocks: need at least $25,000 to avoid pdt rule
- Can avoid pdt rule with offshore brokers like CMEG & Ustocktrade
- Swing trading small cap stocks can be good with the right entry
1. LEARN HOW TO INVEST IN THE STOCK MARKET WITH LITTLE MONEY
People are always asking us how to invest in the stock market with little money. Not everyone has a ton of money laying around to invest. Investing used to be a thing only rich people did but that isn’t the case any longer. The world has grown up!
Nowadays people from all walks of life whether rich, middle class or poor can invest and make a better life and future for themselves. You don’t need thousands of dollars to invest.
You can take that small amount of money and grow it over time. Don’t expect to take $500 and turn into a million dollars in a year. It takes time. The more you grow your stock trading account the more you can put up in a trade.
You won’t have a small amount of money forever. Especially if you’re smart about it. Starting small is fine, the important part is starting!
WHAT SHOULD I INVEST 30K IN?
- What should I invest 30K in:
- First of all never invest any money unless you know what you're doing
- Don't listen to anyone unless they are a professional
- A professional might suggest opening an IRA and invest some of that capital
- Consider investing in some gold and silver as a hedge or for times of uncertainty
- Put some into a brokerage account
- Learn options trading
- Credit spreads are a great and safe trading strategy to grow investment capital
- Facebook, Apple, Netflix, Google, and Amazon are solid large caps
- Dividend stocks long term could be good as well
HOW CAN I INVEST WITH 100 DOLLARS?
- How can I invest with 100:
- First of all it's difficult to make money with this little capital
- Credit spreads might be best opportunity
- You might be able to buy and sell etf's (limitations due to capital requirements)
- Taking an investing course would be the best bet long term
There are a lot of people that put off investing because they think you have to have thousands of dollars to do so. Thankfully that is not the case these days. If you want to be a good investor you need to develop good habits.
If you make investing a habit now, you’ll be in a good position later on in life. This should be something they teach us in school quite frankly, as early as middle school.
When you’re investing, being disciplined is super important. Investing can seem overwhelming at first. Maybe even a little scary. That’s why studying is important. It's also good to spend some time around people who have been investing a long time.
Pick their brain, ask them to share their wisdom. Learn from their mistakes. Take our online trading courses on our website to learn how to get started in the stock market with little money.
One of the very first things you need to do when you’re learning how to invest in the stock market with little money is set up a practice account. ThinkOrSwim has a fantastic simulated account where you can paper trade.
Paper trading allows you to practice without using real money. This is especially important if you’re starting out with a small amount.
Making one bad trade could blow your entire account. That’s why we at the Bullish Bears stress making hundreds and even thousands of practice trades. Make sure to bookmark our daily penny stock watch list page. We also have a swing trade watch list page as well.
When you’re paper trading, you learn how to read the charts, find the trends, support and resistance, how to place a trade. These are the tools that make you successful. By practicing you learn how to use the technical indicators that show you what a stock is going to do. Is this stock bullish or is it heading in a bearish direction?
If you make a mistake in your paper account, that loss isn’t going to wreck your account. Instead you learn what you did wrong and you know what to fix so your next practice trade is profitable. Take our Thinkorswim to learn how to set up your account and use the platform.
2. BROKERAGE ACCOUNTS ARE IMPORTANT
Picking a brokerage account is important because of the fees they charge for a trade. If you’re putting up $100 and the brokerage firm charges an $8 to $10 commission fee, you’ve only got about $90.
That’s why picking an investment firm that will work with you or that already has low fees is smart when you’re learning how to invest in the stock market with little money.
Thinkorswim is great with lowering their commission fees if you give them a call and let them know you can get it cheaper elsewhere. Charles Schwab is another great brokerage firm that has low cost commission fees. Both are great for investing.
HOW CAN I START INVESTING WITH $20?
- How can you start investing with $20:
- First of all good luck! Not enough capital to get started
- Might be best to buy a book on investing
- If you want to grind it out then you might try an app like Acorns or Stash App
- Invest your spare change with debit card transactions on these trading apps
- Robinhood and Webull are commission free brokers
- Might be able to buy and sell some penny stocks but will be difficult to grow account
Their fees $0-$5. Robinhood is another good one to look at because they have ZERO commission fees. Click here if you'd like to open a Robinhood brokerage account and receive a free share of a stock such as Apple, Ford or Groupon!
Capital Markets Elite Group (CMEG) - This is a fabulous off shore broker that has NO PDT rule, uses DAS trader for a platform, provides 2.95 trades, and with a special discount from our community use ”cmegbullishbears” (case sensitive) when you sign up during the application process. CMEG has been around since 2013, is registered with the IRS, and insured by Loyds of London. They also offer 4:1 and 6:1 margin on accounts with $500, or $2500, respectively. We are using it for our main day trading platform and recommend it to everyone in our stock market community who is interested in active trading with a small account.
2. SMALL INVESTMENTS BIG RETURNS
When you’re learning to invest in the stock market with little money the intent is small investments and big returns. In a perfect world that would happen all the time but it doesn’t. Making a $25, $50 or $75 profit on a small investment is great.
Don’t get caught up in making a large profit on every trade in the beginning. That’s not to say it won’t happen at times and it’s awesome when it does but if you let that become the focus, you’ll miss out on growing that account (we will teach you how to read the stock market in our free courses).
Finding stocks to trade that aren’t expensive can seem daunting. Especially when you’re starting out. When you think of investing a lot of times you think of company’s like Apple or Amazon.
Those can be good to hold as long term investments but if you’re looking to make a profit if the short term the stocks that are cheaper, think $3 to $10 are more appealing. Remember to always take a profit. You’ll never go broke doing that.
3. HOW TO INVEST IN THE STOCK MARKET
As you begin to processes of learning how to invest in the stock market with little money you’ll notice that investing can be emotional. Making winning trades in exciting and losing money hurts.
You’re never going to win 100% of the time. Taking a loss is ok. Always protect your capital! Take your profits and cut your losses quick - that is the key to longevity in the markets!
Check out our trading service to learn more about our community and what we offer.